Next steps after court ruling on Hampshire methodology

The Administrative Court’s judgment in June 2020 upheld our general approach to calculating increases in compensation as a result of the Hampshire ruling. But it also said we need to make sure members and survivors each receive at least 50% on a cumulative basis of the actual value of the benefits their scheme would have provided. 

These additional requirements mean we’d need to amend our methodology. It’s also different to our view of what the Insolvency Directive requires. 

So we’re appealing: 

• the approach we may adopt to meet the requirement for members to receive 50% of the value of their entitlement 
• how survivors’ benefits should be dealt with 

Timing

We lodged our appeal on 20 August 2020. 

First we’ll need the Court of Appeal to agree to let us proceed with the appeal.  If the Court of Appeal doesn’t agree, that will be the end of the case.  We don’t know when we’ll find out if we can proceed or when the hearing might take place. We’ve asked for it to be dealt with as soon as possible.

Ongoing work

We’re continuing to work on our plans for how we could implement the June 2020 judgment, so that we’re in a position to do so if necessary as soon as possible after we know the appeal outcome. 

Payments

We’ve asked the Court of Appeal if we can wait until the appeal process is completed before we start making any changes to payments which would be needed because of the June 2020 judgment. This is so we don’t pay the wrong amount, and then have to claim back overpayments from members.   

Until we know more, we’ll continue to pay members their current level of benefits.

We’ll continue to withhold arrears payments for those we’ve already started paying increased benefits as a result of the Hampshire ruling. This is because the result of the appeal could mean we’ve overpaid increases, and if this is the case we might have to recover the overpayment. 

The compensation cap

The Department for Work and Pensions (DWP) has lodged an appeal against the ruling that the compensation cap is unlawful. DWP is responsible for the cap’s level and the legislation governing it.  

Until we know more, we’ll continue to apply the cap according to the current levels set by DWP.

Read our FAQs for PPF and FAS members for more information.